Tax-Exempt Application Available in Streamlined Version

by Gregory S. Dowell

The first step for organizations seeking to obtain a tax-exempt status as a 501(c)(3) organization is to complete an application for tax-exempt status with the Internal Revenue Service. Historically, that application has been made on IRS form 1023. The application is relatively long and intensive, and no doubt is a deterrent to many organizations who do not have the background, expertise, or resources to work through the application.

Good news, especially for smaller organizations seeking the status, is hopefully on the way. The IRS just announced that it is streamlining the application process by issuing a more compact and easier-to-complete form 1023-EZ. The form, titled “Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, is now in a draft phase, and the Office of Management and Budget is currently seeking comments from the public and professionals. The form is shorter and the goal is to make the application process less burdensome compared to using the longer form 1023. The IRS envisions that most smaller organizations will be able to use the 1023-EZ form. It is planned that the form will be available for use this summer.